27th March 2018
US LAWMAKERS CALL FOR PRESSURE ON MYANMAR OVER PYONGYANG TIES
On 27th March, the Asahi Shimbun in Japan reported whilst the US had imposed sanctions on companies across the globe to punish illicit trade with North Korea, Myanmar, which is suspected of acquiring ballistic missile systems from the pariah state, has escaped the full force of the “maximum pressure” campaign. US lawmakers of both parties say that’s a worrying gap in the sanctions regime, with a recent UN report cites Myanmar’s “ongoing” arms relationship with North Korea. President Barack Obama lifted all sanctions on Myanmar in the fall of 2016 after Nobel laureate Aung San Suu Kyi was elected to power, ending 5 decades of army rule. After President Trump took office, Myanmar’s main player in trade with North Korea, the Directorate for Defense Industries, was designated but only by adding to the “Entity List” of the Department of Commerce – which restricts it from US government contracts and imposes additional export licensing restrictions. The UN report also mentions also mentioned Soe Min Htike Co. Ltd. and Excellence Mineral Manufacturing Co. Ltd., both companies that were also once on the US Treasury sanctions list. Myanmar said it had taken some positive steps to curtail its North Korea ties by stopping money transfers and restricting the activities of North Korean personnel. However, the UN report claimed that Myanmar had an “ongoing arms relationship” with the Korea Mining Development Trading Corporation, or KOMID, and that Myanmar received ballistic missile systems, multiple rocket launchers and surface-to-air missiles from North Korea.
http://www.asahi.com/ajw/articles/AJ201803270021.html
FORMER AUSTRALIAN RUGBY PLAYER PLEADS GUILTY OVER HIS ROLE IN A WILDLIFE SMUGGLING RING
The Sydney Morning Herald in Australia on 27th March reported that NRL rugby player Martin Kennedy, 29, has pleaded guilty to taking part in an international animal smuggling ring. He was arrested after federal police raided his Bondi home in March last year, finding snakes and $100,000 cash.
EUROPOL: ARRESTS OF GANG AFTER LAUNDERING €1 BILLION WORTH OF BITCOIN
News BTC on 27th March had more on Spanish police announcing the arrest of ‘Denis K.’, the suspected leader of a cyber-crime gang who allegedly stole up to €1 billion from banks all around the country through their ATM. The group also set up a Bitcoin farm as a means of laundering money, according to the authorities. The Ukranian-Russian criminal organisation has been active since 2013, with members in 40 countries and carrying out attacks on 100 financial institutions, said Europol. Alicante police seized €500,000 worth of jewels, 2 luxury cars during the raid, and 2 homes valued at approximately €1 million. ‘Denis K.’, the alleged gang leader, would load prepaid cards with Bitcoin through financial platforms in Gibraltar and the UK, and then spend them in Spain on the aforementioned goods, such as cars and homes.
https://www.newsbtc.com/2018/03/27/europol-arrests-gang-after-laundering-e1-billion-worth-of-btc/#
BRITISH COLUMBIA ASKS FOR FEDERAL HELP TO TRACK CASH SALES OF LUXURY VEHICLES
Global News in Canada on 27th March reported that currently there is no tracking by government of cash purchases for luxury items. Vancouver is seen as the country’s luxury car capital and the federal government could decide to target the problem based on geography. But to avoid buyers just going to other markets, another option is to require reporting for any cash purchase higher than $10,000. The review of AML controls in British Columbia has already recommended gaming service providers complete a source of funds declaration for cash deposits of $10,000 or more.
https://globalnews.ca/news/4106539/b-c-luxury-car-money-laundering/
EU FUND KICKBACK SCHEME, FBI “HAS HUNGARIAN IN WITNESS PROTECTION”
The Budapest Beacon has a story on 27th March saying that Magyar Nemzet reports that, according to its sources, the FBI has given some form of witness protection to a Hungarian citizen with knowledge of how EU funds are embezzled in Hungary. The person is reportedly being sought by Hungarian authorities for other reasons. Sources are said to believe the individual played a key role in a complex money-laundering ring which could be responsible for embezzling some €3-4 billion in recent years to Arab and Asian bank accounts. It is said that the FBI suspects the funds were re-distributed through MKB bank and other financial institutions regulated by the Hungarian government. The Americans believe one portion of the illicitly obtained funds returned to Hungary through straw men in the form of Arab investments to purchase “luxury hotels, castles, and other real estate”.
POSSIBLE LARGE-SCALE MONEY LAUNDERING SCHEME LINKED TO EU FUND IN HUNGARY
Hungarian Spectrum reported that 19 people had been charged in the US federal court of the District of Columbia with taking part in various international fraud and money laundering conspiracies that led to losses of more than $13 million, mostly at the expense of US citizens. The 19 were members of “an interconnected web of money launderers” and a “transnational organised crime group.” Among the 19, 6 were identified as Hungarian citizens, who by the time of the indictment were in Hungary. It is claimed that through this money laundering operation about €4 billion were smuggled out of Hungary – about 18.5% of the financial assistance Hungary had been receiving over the years from the EU as part of the so-called convergence programme.
ART GALLERY IN MONEY LAUNDERING INQUIRY FOLDS
The Times reported on 27th March that a London art dealership at the centre of an American money-laundering investigation has gone bust, with administrators have been called in at Mayfair Fine Art, whose former director is accused of having offered to use a £6.7 million Picasso to launder money. Matthew Green, who owns the company and is the son of one of the world’s top art dealers, has been charged in the US in connection with money laundering.
https://www.thetimes.co.uk/article/gallery-in-money-laundering-inquiry-folds-0923v3wwb
CAN AML AND CRYPTOCURRENCIES CO-EXIST? ISRAELI COURT SAYS CRYPTOCURRENCY EXCHANGE BANK ACCOUNT CANNOT BE MONITORED UNDER AML RULES
Yigal Arnon & Co in an article on 26th March reported that an Israeli District Court ruled that a bank account opened by a cryptocurrency exchange could not be properly monitored under AML rules. It considers some of the key elements about recent ruling by the Israeli District Court about the use of cryptocurrencies.
HOW DOES THE AUSTRALIAN GOVERNMENT ADDRESS SERIOUS FINANCIAL CRIME?
Nyman Gibson Miralis in a briefing on 22nd March in the light of the Australian Criminal Intelligence Commission (ACIC) report: Serious Financial Crime in Australia 2017. This identifies key financial crime markets and enablers. The report also details a number of Australian Government initiatives to tackle serious financial crime and reduce the impact on the Australian public. In conclusion the article says that the Australian Government has implemented a wide range of initiatives to identify and address the issue of serious financial crime in Australia, with an aim to reduce the burden on the Australian public and businesses. Initiatives such as the Serious Financial Crime Taskforce are a collaborative effort of a number of government agencies. As of August 2017, the efforts of the Serious Financial Crime Taskforce had recouped over $152 million for the Commonwealth, raised over $391 million in tax liabilities, executed 54 search warrants, completed 587 audits, prosecuted 4 people and convicted 4 people.
https://ngm.com.au/australian-government-serious-financial-crime/
CONFISCATION AND MONEY LAUNDERING: UK SYSTEM IN NEED OF REPAIR
In a briefing on 22nd March, Bright Line Law published an article in which Jonathan Fisher QC comments on the deficiencies of the existing confiscation and money laundering regime and the work of the Law Commission in reforming these areas. This follows the Home Office having commissioned the Law Commission to analyse the functions of, and benefits and problems arising from, the reporting regime in the Proceeds of Crime Act 2002. The Law Commission acknowledges that the regime disproportionately affects businesses and is not optimal in preventing, detecting, and prosecuting money laundering. The expedited project, expected to report later in 2018, will include consideration of the consent regime and will seek to optimise the detection of money laundering through effective reporting.
THE END OF ARMS CONTROL?
A BBC Radio 4 “Analysis” documentary says that existing arms control treaties are under threat – at the same time that new types of weapon emerge, with nothing to regulate them. There is a growing crisis in the arms control regimes inherited from the Cold War era, which threatens to undermine existing agreements. At the same time, new technologies are emerging like drones, cyberwar, biotech and hypersonic weapons, which are not covered by existing rules. BBC Defence and Diplomatic Correspondent Jonathan Marcus asks if a new era of chaos beckon or might the whole idea of arms control and disarmament be revived?
http://www.bbc.co.uk/programmes/b09wrxv9
THE END OF SPECULATIVE MERGERS AND “SHADOW MANAGERS’ IMMUNITY” IN SLOVAKIA.
Bird & Bird on 23rd March reported that the alarming increase in “speculative mergers” and the increasingly frequent occurrence of straw men in commercial companies’ management structures has long been seen as a major obstacle on the Slovak market. In response, the Ministry of Justice has amended the Commercial Code. The briefing summarises the key changes that affect all business entities, not only with respect to mergers, but also in other areas of day-to-day commercial activity in Slovakia, including “wilful insolvency” and shadow directors.
REPORT: €48 BILLION HIDDEN FROM BELGIUM TAXMAN IN LUXEMBOURG
EU Observer on 27th March reported that dozens of Belgian companies and individuals, including 60 of the country’s 100 richest people, and former prime minister Yves Leterme, have created shell companies in Luxembourg to benefit from loose tax rules.
https://euobserver.com/tickers/141454
The report (in French) in Le Soir newspaper in Belgium –
NEW SLOVAK GOVERNMENT SWORN IN ON ANTI-CRIME PLEDGE
On 27th March, EU Observer reported that a new Slovak government, led by Peter Pellegrini, has won a parliamentary confidence vote and he succeeds Robert Fico who resigned over the murder of journalist Jan Kuciak and his fiancée, followed by anti-corruption demonstrations.
https://euobserver.com/tickers/141451
Deutsche Welle on 27th March carried an article saying that rampant corruption in Slovakia could spook some investors.
http://www.dw.com/en/rampant-corruption-in-slovakia-could-spook-some-investors/av-43145594?src=ilaw
THIRD COUNTRIES ALIGN WITH EU UKRAINE SANCTIONS
On 26th March, the EU Council announced that certain third countries had agreed to align their sanctions measures so that they complied with EU sanctions for another 6 months (to 15th September 2018) with Ukraine sanctions. The countries involved are Montenegro, Albania, Norway, and (understandably) Ukraine.
THIRD COUNTRIES ALIGN THEMSELVES WITH CHANGES TO EU SYRIA SANCTIONS
On 26th March, the EU Council announced that Macedonia, Montenegro, Serbia, Albania, Iceland, Liechtenstein, Norway, Moldova and Georgia had agreed to align their Syria sanctions with those of the EU by adding the 2 names added to EU lists by Council Decision 2018/284/CFSP.
RUSSIAN COURT OKAYS PARALLEL IMPORTS TO COUNTER “ILLEGAL” SANCTIONS
HK TDC on 27th March says that a recent court decree seen as charter for illicit imports, with sanctions deemed a ‘damaging violation’ of Russia’s rights. It says that the practice of “parallel importing” has effectively been legalised in Russia, with the country’s judiciary apparently viewing it as an acceptable means of circumventing the “unfriendly” and “illegal” sanctions imposed by the EU and US. The ruling stems from a decision by the Constitutional Court to overturn an earlier verdict by the Kaliningrad Region’s Arbitration Court that had appeared to criminalise such imports. In effect, this gives the county’s courts carte blanche to negate intellectual property rights (IPR) whenever those rights are exercised in a way that could be deemed to be detrimental to Russia’s interests. This basically acts a charter for parallel importers to distribute any products within Russia in instances where the IPR holder has declined to supply such products.
NUCLEAR SECURITY (SECRETARY OF STATE SECURITY DIRECTIONS) REGULATIONS 2018
This UK SI 2018/408 comprises Regulations that provide for the Secretary of State to give a direction (a “security direction”) in response to certain types of urgent security threat, and to persons responsible for a civil nuclear site, nuclear or other radioactive material stored on part of a nuclear site, a nuclear construction site or other nuclear premises, the transport of nuclear material, or those persons holding sensitive nuclear information or equipment or software relating to uranium enrichment. The power to direct arises where the Secretary of State is satisfied that those premises or that material or information is at risk from an imminent threat of terrorism, espionage, sabotage or theft. It also arises where the Secretary of State is satisfied that there is an imminent threat of sensitive nuclear information or equipment or software relating to uranium enrichment being compromised or disclosed. The Regulations take effect from 1st October 2018.
http://www.legislation.gov.uk/uksi/2018/408/regulation/1/made
KAZAKHSTAN PLANS TO APPEAL US COURT’S RULING ON $520 MILLION COMPENSATION TO BUSINESSMAN
KazTag in Kazakhstan on 27th March reported that Kazakhstan is going to appeal the US court’s ruling on compensation of $520 million to Moldavian businessman, Anatolie Stati. At the end of December, assets of the National Fund of Kazakhstan worth $22 billion (40% of the total amount of the National Fund of Kazakhstan) were “frozen” by the New York Mellon Bank in connection with the lawsuit filed by Anatol Stati and his companies against the government of Kazakhstan. Anatol Stati was a Soviet functionary who later founded Ascom Group S.A. The company was established in the mid-90s for oil and gas production, and was exploring oil and gas in Turkmenistan, and then began working in Kazakhstan. The final outcome of the dispute is said to depend on the result of a court case before the UK High Court. Kazakhstan’s assets were frozen after companies owned by Anatol Stati won lawsuits against the government, which seized their petroleum operations in the Borankol and Tolkyn fields in 2010.
https://www.eurasiareview.com/08012018-freezing-of-kazakh-assets-oped/
https://thediplomat.com/2018/01/lawsuits-threaten-kazakhstans-oil-money/
UKRAINE’S CHIEF PROSECUTOR CONFIRMS PROBE AGAINST TOP ANTI-GRAFT PROSECUTOR
Unian on 27th March reported that Ukrainian Prosecutor General Yuriy Lutsenko has confirmed investigative actions against Chief of the Specialized Anti-corruption Prosecutor’s Office (SAPO) Nazar Kholodnytsky, but said he could not yet disclose more information.
AVANT GARDE CASE AGAINST FORMER SRI LANKA DEFENSE SECRETARY SCHEDULED FOR JULY 9TH
On 27th March, the Colombo Page reported that the case filed against former Sri Lankan Defense Secretary Gotabhaya Rajapaksa and 8 others by the Bribery Commission over the floating armoury of the Avant Garde Maritime Services will be heard on 9th July. The floating armoury was used by a number of maritime armed (anti-piracy) security concerns. The defendants are accused of causing a financial loss to the Government by granting approval to the Avant Garde Maritime Services to operate a floating armoury in Galle Harbor during 2012-15.
http://www.colombopage.com/archive_18A/Mar27_1522117343CH.php?src=ilaw
TWITTER BANS CRYTOCURRENCY ADS ON FRAUD FEARS
The Japan Times on 27th March reported that Twitter has announced a ban on advertisements for initial offerings of cryptocurrency or sales of virtual currency tokens, sending the value of bitcoin diving below $8,000. Twitter followed the lead of Google and Facebook, which earlier this year cracked down on digital currency ads to protect users from being duped.
BRIBERY CASE AGAINST ISRAELI DROPPED, ENDING SIEMENS INVESTIGATION
Haaretz in Israel on 27th March reported that the criminal case against Shlomo Nass, one of Israel’s top bankruptcy attorneys, has been closed, marking the end of the long-running probe into bribes paid by Germany’s Siemens to top executives at Israel Electric Corporation. Siemens was found to have paid millions in bribes to win contracts from the state-owned utility, and a handful of IEC managers were convicted in the case. The case against Nass continued until it was terminated for what the state prosecutor said was a lack of evidence.
FOUNDER OF MMM, BIGGEST PONZI SCHEME IN RUSSIA’S MODERN HISTORY, DIES IN MOSCOW
RT on 26th March reported that Sergey Mavrodi, the founder of the infamous MMM financial pyramid, has died in a Moscow hospital, aged 62. In this article, RT looks at how Mavrodi pulled off his massive investment fraud and went on to build a bitcoin pyramid in China.
https://www.rt.com/business/422408-mavrodi-founder-mmm-pyramid-dies/?src=ilaw
CANADIAN MINING FIRM SETTLES US BRIBERY CASE
On 26th March, the Wall Street Journal reported that Canadian gold-mining firm Kinross Gold Corp. settled with US authorities over a probe into potential violations of the Foreign Corrupt Practices Act in its West African mining operations. Kinross agreed to pay $950,000 to the SEC to resolve its investigation without admitting or denying wrongdoing; it agreed to file 2 semi-annual reports on the status of its West African compliance measures. The company said prosecutors closed the case in November without filing charges.
UK ATTORNEY GENERAL’S GUIDELINES ON DISCLOSURE
On 26th March, the Attorney General in the UK reissued revised guidance on how to apply the criminal disclosure regime contained in the Criminal Procedure and Investigations Act 1996 (CPIA). They replace the existing guidelines issued in 2005 and the supplementary guidelines on digital material issued in 2011, which is an annex to the general guidelines. The guidelines are intended to operate alongside the Judicial protocol on the disclosure of unused material in criminal cases.
https://www.gov.uk/government/publications/attorney-generals-guidelines-on-disclosure-2013
MALAYSIAN POLITICIAN LIM GUAN ENG ON TRIAL FOR GRAFT
On 26th March, Baker McKenzie reported that Penang Lim Guan Eng, Chief Minister of Malaysia’s Penang state, has been brought to trial on corruption charges. Co-defendant Phang Li Koon is on trial for aiding in Lim’s purchase of the home. Lim is a staunch critic of Prime Minister Najib Razak and has accused the charges of being politically motivated. If convicted, Lim faces a sentence of up to 20 years in prison.
http://www.riskandcompliancehub.com/malaysian-politician-lim-guan-eng-on-trial-for-graft/
WHISTLEBLOWER AWARDED $33 MILLION IN TOP US PAY-OUT
KYC 360 on 27th March reported that the SEC said it paid out more than $33 million to a single whistleblower in its Dodd-Frank whistleblower awards, surpassing the previous high of $30 million in 2014. 2 whistleblowers also shared a $50 million award, it added. Since it began issuing its first award in 2012, the SEC has awarded over $262 million to 53 whistleblowers. The awards can range from 10 percent to 30% of the money collected when the monetary sanctions exceed $1 million.
https://kyc360.com/news/financial-services-whistleblower-awarded-33m-top-us-pay/
US TO END AID TO COUNTRIES HELPING NORTH KOREA’S CYBERATTACKS
Yonhap News in North Korea on 27th March reported that the US Government will stop aid to any country involved in deals that can be instrumental to strengthening North Korea’s cyberattack capabilities, according to the Omnibus Spending Bill, signed by President Trump. It stipulates that none of the US government funds will be available for assistance to countries that engage in “significant transactions contributing materially to the malicious cyber-intrusion capabilities of the North”. It is the first time that the US has introduced a legislation against the North’s cyberattacks.
http://english.yonhapnews.co.kr/northkorea/2018/03/27/22/0401000000AEN20180327009400315F.html
SINGAPORE REPEALS WORK PERMITS OF ALL NORTH KOREANS
On 27th March, Yonhap News reported that Singapore has nullified work permits for all North Koreans in the country in line with the latest UN sanctions over its weapons programmes, according to the UN sanctions committee.
http://english.yonhapnews.co.kr/northkorea/2018/03/27/42/0401000000AEN20180327003400315F.html
CZECH COMPANY LAUNCHING HANDGUN AND RIFLE MANUFACTURING IN EGYPT
n 27th March, the Firearms Blog in the US reported that Ceska Zbrojovka, a small arms company is currently in the process of launching a small arms plant in Egypt. The director Lubomír Kovařík mentioned in an interview that the plant would be manufacturing both handguns and rifles.
http://www.thefirearmblog.com/blog/2018/03/26/cz-launching-handgun-rifle-manufacturing-egypt/
PRIVATE MILITARY AND SECURITY COMPANIES
On 27th March, the Oxford Research Group carried an article in which defence and security expert, Christopher Spearin, discusses the use of private military and security companies (PMSC) by states and the implications of this trend for international security.
THE LOADSTAR LONG READ: DANGEROUS GOODS – LITHIUM BATTERIES
On 27th March, a comprehensive article from Loadstar considered the situation re the transport of lithium batteries by air freight, and asked if sea freight was one answer. It said that lithium ion batteries continue to dominate the discussion in the transport of dangerous goods by air. A series of high-profile incidents at the start of the decade saw carriers ban them from passenger services. Since then a string of regulations has been pushed through to both ease the fears and the return of batteries to belly holds of passenger aircraft (where airfreight is carried). But problems persist, it argues. There were 2 suspected incidents in February alone, one involving what was reportedly an entire payload of lithium ion batteries, and another thought to have involved a passenger’s power bank. There have been dangerous goods rules changes, and while welcome, rule changes still rely on honesty from shippers. Security screening such as x-rays helps those in the supply chain to detect hidden dangerous goods, such as lithium batteries, and is performed in every country. However, the party responsible for this is dictated by the National Security Programme, and can fall to airport authorities, approved third parties, carriers or the forwarder. It says that IATA is planning to establish an Air Cargo Incidents Database (ACID), which would amalgamate anonymised airline incident reports, offering a secure environment for airlines and ground handlers to pool safety and operations information.
UK TRANSIT MANUAL SUPPLEMENT
On 27th March, HMRC published an updated version of its guidance gives information to supplement the European Commission Transit Manual, covering transit (movement of goods) in the UK and simplified procedures. It provides extra information from the UK perspective, including information on Proof of Union Status and the Additional Control Procedures (T5). Union Transit (formerly Community Transit) covers the controlled movement of goods within the EU, and can include movement through other non-EU countries (when it is called Common Transit).
https://www.gov.uk/government/publications/transit-manual-supplement
INDICTMENT OF IRANIAN OVER HOUSING PROJECT IN VENEZUELA RAISES QUESTIONS
The Export Law Blog on 27th March carried a posting asking questions about the case behind the arrest of Iranian national, Ali Sadr Hasheminejad, in New York in connection with a Venezuelan housing construction project undertaken by his family’s business in Iran. It says that, according to the indictment, the governments of Venezuela and Iran in 2005 agreed that Iran would co-operate in the building of new housing in Venezuela and under the agreement, the parties would sign “commercial contracts” to complete the project. Thereafter, the Stratus Group, a private Iranian conglomerate, assumed the construction project. Stratus incorporated Iranian International Housing Corporation (IIHC), an Iranian company was responsible for carrying out and completing the housing project in Venezuela. Hasheminejad, the defendant, was a member of the family that controlled the Stratus Group and its subsidiary IIHC. He was responsible for overseeing the project finances. Funds transferred funds to IIHC, because they were to be in US Dollars, transited various unnamed banks in New York, and as a result, the indictment alleges that Hasheminejad caused these banks to export financial services from the US to Iran in violation of the Iran Transactions and Sanctions Regulations.
FRENCH NAVY SEIZES 530 KG HEROIN IN ARABIAN SEA
On 27th March, Defence Web reported that French Navy frigate Jean de Vienne has seized 530 kg of heroin in the Arabian Sea, its second drug seizure this year whilst the vessel was supporting Task Force 150, a naval task force operating in the Indian Ocean region. A suspicious dhow was located by a Lynx helicopter. A search team boarded the vessel and found the drugs hidden in a double bulkhead. On 5th March, the ship had seized over 4 tonnes of hashish during an operation in the international waters of the Arabian Sea.
NIGERIA AND SWITZERLAND SIGN AGREEMENT TO RETURN STOLEN GOODS
On 27th March, Defence Web reported that Nigeria and Switzerland signed a MoU paving the way for the return of illegally acquired assets. Switzerland said in December it would return to Nigeria around $321 million in assets seized from the family of former military ruler Sani Abacha via a deal signed with the World Bank.
REPORT CLAIMS 81% OF ICO ARE “SCAMS”
BTC Manager on 27th March carried an article saying that the Satis Group, described as the premier ICO Advisory Group, have classified Initial Coin Offerings (ICO) by their quality to provide a clear picture of ICOs’ actual progress. Satis Group’s findings are shocking but is a bitter truth that cryptocurrency space participants must swallow. According to their report, almost 81% ICO are scams, at the same time, only 1.6% of them are promising. The Satis Group classifies ICO starting from the first proposal of fundraising to it being listed on the cryptocurrency exchange platform. Before we get to the results, it is important to understand how the ICO have been classified – Scams; Failed; Gone Dead; Dwindling.
https://btcmanager.com/satis-group-analysts-81-percent-of-icos-are-scams/
1 MILLION CIGARETTES SEIZED IN SUSPECTED £500,000 TOBACCO FRAUD
The Scotsman on 27th March reported that Border Force intercepted and searched a trailer which arrived at Rosyth Dockyard on 20th March from Belgium. The trailer has been seized and a 48-year-old Polish man has been arrested and charged with the evasion of excise duty.
SEC SETTLES ANOTHER FCPA INTERNAL CONTROLS ACTION CASE
On 27th March, an article from Dorsey & Whitney was concerned with the Kinross Gold Corporation, where a Canadian mining firm acquired subsidiaries in Mauritania and Ghana with little to no internal controls that received repeated warnings about those deficiencies but failed to take adequate corrective steps. An internal audit reports for the subsidiaries contained a series of recommendations for improving the internal controls. Management agreed to swiftly implement the recommendations, but it largely failed to follow through on the recommendations designed to prevent bribery and corruption.
https://www.jdsupra.com/legalnews/sec-settles-another-fcpa-internal-75647/
OECD: SWITZERLAND’S SIGNIFICANT FOREIGN BRIBERY ENFORCEMENT SHOULD BE ACCOMPANIED BY HARSHER PENALTIES AND PRIVATE SECTOR WHISTLEBLOWER PROTECTION
A news release from the OECD on 27th March said that the OECD Working Group on Bribery has just completed a review of Switzerland’s enforcement of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related instruments. As well as pointing to positive aspects of the country’s efforts to fight foreign bribery, the Working Group made a range of recommendations to Switzerland, including to:
- adopt urgently an appropriate legal framework to protect private sector whistleblowers from any discriminatory or disciplinary action;
- ensure that the sanctions imposed in practice for foreign bribery against natural and legal persons are effective, proportionate and dissuasive;
- ensure broader and more systematic publication of concluded foreign bribery cases, in accordance with the legal framework;
- adopt urgently the reform of the legislation that governs mutual legal assistance (MLA) currently underway with the aim of removing certain procedural obstacles and formalising proactive MLA.
MISS VENEZUELA PAGEANT SUSPENDED AFTER SEX FOR MONEY SCANDAL
OCCRP on 27th March reported that the popular Miss Venezuela contest may not be held this year – or again – pending an investigation into clams that some previous contestants had sponsors who paid for their plastic surgeries, clothes and beauty treatments, sometimes in return for sexual favours. Amongst other things, the article carries a quote saying that, as the country’s economic situation worsened, it was harder for the girls to get the $32,000 required in order to compete
18 ARRESTS IN GERMANY AND SPAIN AFTER POLICE UNCOVER 1 TONNE OF MARIJUANA, 2 CANNABIS FACTORIES AND CASH
On 27th March, a news release from Europol about Operation Carambolas, a joint operation from the Spanish Guardia Civil and the German Central Customs Investigation Service, has seen 18 people arrested and 9 more prosecuted. The operation, supported by Europol, broke up an organised criminal group involved in drug trafficking and other unlawful activities across the EU. 1 ton of marijuana, €212,000 in cash, firearms, ammunition and 8 vehicles were seized. The criminal group trafficked marijuana from Spain to other EU countries, in particular to Germany, through a network of cells established in Malaga and Granada, Spain, orchestrated from Bremen in Germany. The criminal network was structured in such a way so that even if one cell were to be discovered by police, the supply of illegal drugs could still be guaranteed.
RULING HIGHLIGHTS GAP IN UK LAW ON SOFTWARE
Out-Law on 27th March carried a briefing saying that a recent ruling by the Court of Appeal highlights a gap in the law on software and should prompt a change in UK legislation. The Court held that electronically supplied software does not qualify as ‘goods’ for the purposes of the Commercial Agents (Council Directive) Regulations. As a result, commercial agents supplying software on disks benefit from statutory rights to recourse from manufacturers, including where their agent contracts are unfairly terminated, while agents supplying downloadable software are deprived of those rights. The briefing maintains that, though the Court was right in legal terms, the anomaly is unfair, and does not reflect the way in which software is supplied in the digital age.
https://www.out-law.com/en/articles/2018/march/ruling-highlights-gap-law-on-software/
DANSKE BANK BANS CRYPTOCURRENCIES
Baker McKenzie on 27th March reported that, concerned both with the lack of consumer protection and its vulnerability to criminal activity, Denmark’s largest bank, Danske Bank, has banned cryptocurrencies from its trading platforms. The ability to buy financial instruments that are related to the price of cryptocurrencies will no longer be available.
http://www.riskandcompliancehub.com/danske-bank-bans-cryptocurrencies/
CHINA REVEALS SALE OF ADVANCED MISSILE-TRACKING TECHNOLOGY TO PAKISTAN
Janes.com on 27th March reported that China has revealed the sale of an advanced missile-tracking system to Pakistan that may enhance its ability to develop multiple independently targetable re-entry vehicle (MIRV) technology for its medium- to long-range missile systems. Chinese engineers and technicians completed integration tests over the past 3 months and provided “training and guidance” to Pakistani personnel.
YEMEN’S SOUTHERN POWDER KEG
Chatham House on 27th March released a briefing saying that an unintended consequence of the civil war in Yemen is that the south of the country is rapidly moving towards outright autonomy (bearing in mind that Yemen used to be 2 separate states until 1990). The briefing says that if a breakaway effort were to occur before the end of the war, it would undermine the UN-led peace process.
https://www.chathamhouse.org/publication/yemens-southern-powder-keg
UK GOVERNMENT ANNOUNCES SIGNIFICANT CHANGES TO THE UK MERGER CONTROL REGIME TO FURTHER PROTECT NATIONAL SECURITY INTERESTS
Eversheds Sutherland on 27th March published a briefing saying that the UK Government confirmed on 15th March that following consultation it has decided to make significant changes to the UK’s voluntary merger control regime. The reforms will materially expand the UK Government’s ability to review and intervene in M&A transactions involving foreign investment on the basis of national security concerns.
LONG-RUNNING “PUMP AND DUMP” SCAM AND COMPANY FAILURES LEADS TO THIRD SEC ACTION AGAINST COMPANY SINCE 2014
Mondo Visione on 27th March reported that the SEC has announced charges against Wedbush Securities Inc. for failing to supervise employee Timary Delorme after the broker-dealer ignored numerous red flags indicating that Delorme was involved in a long-running pump-and-dump scheme targeting retail investors. Delorme agreed to settle fraud charges stemming from the same scheme. This is the second SEC action against Wedbush this year and the third since 2014.
US EXPERTS SAY WHY TRUMP SHOULD SUPPORT IRAN DEAL
The New York Times on 26th March carried a report saying that a bipartisan group of more than 100 national security veterans, who said the US gains nothing by scrapping the Iran nuclear accord. The group, including 50 retired military officers and at least 4 former American ambassadors to Israel, added its voice to a fractious debate over the accord, which Mr. Trump has called “the worst deal” ever.
raytodd.blog 